Secretary-General

Deauville Partnership: OECD’s work on economic governance across the MENA region

Remarks by Angel Gurría, OECD Secretary-General, delivered at the Deauville Partnership Meeting of the Finance Ministers

Tokyo, Friday, 12 October 2012

(As prepared for delivery)

Secretary Geithner, Ministers, colleagues:

Thank you for the opportunity to present brief remarks on the OECD’s work on economic governance across the MENA region.

Good economic governance, from a sound business environment to an effective and open public sector, is key to fostering growth, restoring trust and thus giving citizens the tools necessary to build their future prosperity.

Fostering growth means championing competitiveness in the reform agenda. However, there are leftover barriers which prevent a dynamic private sector from prospering, including obstacles to competition, the heavy role of the public sector, gaps in skills and low levels of entrepreneurship.

Restoring trust is also essential to advancing reforms. Fighting corruption and strengthening governance are crucial conditions for economic growth. But restoring trust also means addressing high inequalities and combating poverty which affects around 40% of the total population in the MENA region.

Failing to meet these challenges threatens the success of the reform process and the transition towards democratic and stable societies in the MENA region. This is not only a challenge for the transition countries; this is a challenge for the global society.

The OECD has been working on investment and good governance for over 10 years by supporting countries in the region strengthen public sector institutions and generate sustainable private sector-led growth.

On investment, our role has been to enhance the capacity of our partners to attract both foreign and domestic investment by strengthening their frameworks and creating a level playing field. We focus on private sector development and on practical ways to improve the business climate, for firms of all sizes.

The OECD held a regional conference on Investment in May 2012 in cooperation with the Arab League, the Union for the Mediterranean (UfM), and United Nations Development Programme, and with participants from the International Financial Institutions, the European Union and the private sector. The conference adopted the “Action Plan for Improvements in Investment Frameworks in the Deauville Partnership Countries”, which presents general and country-specific priority actions to strengthen investment frameworks.

Ensuring budget transparency and improving tax regimes are key to helping the private sector thrive. This is why we are working with Tunisia, who joined the Convention on Mutual Administrative Assistance in Tax Matters in July 2012, to review its tax incentives regime and to support its efforts to develop a new investment law. We are also organising a meeting of the MENA Senior Budget Officials in Tunis this November. This will be an opportunity to promote and implement the OECD best practices on Budget Transparency in the MENA region.

The OECD has also been actively supporting efforts by the transition countries on SMEs facilitation. Following the Deauville Partnership meeting in Rome last July, the OECD is coordinating assistance to transition countries that supports the elaboration of near-term action plans on SMEs, in consultation with international financial institutions. These action plans, developed working closely with each country, will be discussed in a dedicated meeting in London on 1st November.

On governance, we are helping our partners in the region to develop accountable, responsive and inclusive governance frameworks. By fighting corruption and preventing misconduct, countries in the region can enhance the rule of law and rebuild citizens’ trust in government.

Egypt is also undertaking a peer review on e-government, with a particular focus on the government’s efforts to build an e-procurement system.

And Tunisia is developing a comprehensive anti-corruption strategy under the framework of the OECD CleanGovBiz Initiative, to assess strengths and weaknesses of its legal, administrative and economic framework.

We have developed a programme to assist transition countries meet eligibility for Open Government Partnership membership and implementation. Work programmes for Morocco and Jordan have already been agreed upon, while preliminary work on integrity and fiscal transparency is underway with Tunisia.

Ensuring the independence of the national statistics institutes and increasing the quality of their data are also key to increasing the transparency and the accountability of government institutions. The OECD recently hosted a meeting of the Ad-hoc Working Group on Statistics, and we support the participants’ interest to formalize the Working Group and to develop a programme of work.

Ministers, colleagues,

In the current context of socio-economic uncertainty, transition countries need to rely on our support in their efforts to restore investor confidence, tackle unemployment and foster policy conditions for strong, sustainable and balanced growth.

We look forward to continuing our co-operation with the transition countries and to discussing with the broader Deauville Partnership, across its three pillars, the different Action Plans that we are elaborating with each country.